South Africa's hospital company Life Healthcare to invest up to Rs. 794 crore in Max Health.

Life Healthcare (LHC), South Africa's second-largest private hospital company, will invest up to Rs. 794 crore in Max Healthcare to raise its stake to over 46% from 26%. That will bring its holding in the leading Indian hospital chain to the same as that of Max India, the parent company promoted by Analjit Singh, said Rahul Khosla, MD, Max India.

LHC will pay Rs. 67.50 per share in an all-cash transaction that values Max Healthcare at Rs.3,650 crore, he said. After the deal closes, Max India will retain the right to nominate the chairman of the hospital chain and its brand name of Max Healthcare will remain unchanged.

A third partner in the healthcare venture, World Bank arm International Finance Corp, would have the option of either maintaining its 7.5% stake by converting a portion of its preference shares to equity, or exercising a proportionate tag along right with Max India by diluting its shareholding to 5.4%.

The exact investment by LHC will depend on IFC's decision. 'The infused money would be used to retire debt and utilised for expansion plans with continued focus in north India,' Khosla said. LHC, which owns and operates 63 facilities with 8,322 beds in South Africa and Botswana, acquired a 26% stake in Max Healthcare in January 2012 for Rs. 516.5 crore at Rs. 50.24 per share.

ET